Indian states look to digitize land deals with blockchain

NEW DELHI (Thomson Reuters Foundation) - Indian states are exploring a switch to blockchain technology to record land deals digitally and bring transparency to a system that is rife with fraud and leaves the poor at risk of eviction.

At least two Indian states are investigating blockchain - a ledger system tracking digital information - to help modernize Indian property deeds and boost economic growth.

Land records in most Indian states date back to the colonial era, and most land holdings have uncertain ownership. Fraud is rampant and disputes over titles often end up in court.

“The land registry is a good candidate for blockchain as there is no way to verify titles quickly,” said Vishal Batra at IBM Research, who works on the technology.

“The process lends itself to fraud, as an owner can re-sell a property, and the buyer is ignorant. With blockchain there would be savings and efficiency, and there can be no fraud.”

The blockchain technology works by creating permanent, public “ledgers” of all transactions, potentially replacing a mass of overlapping records with one simple database.

Once a land record or real estate transactions is on blockchain, all the parties involved -- banks, government, brokers, buyers and sellers -- can track the deal.

Countries across the world - from Sweden to Dubai, Georgia to Britain - are beginning to embrace or test the technology in their national property records.

Official said the southern states of Andhra Pradesh and Telangana are in talks to put land records on blockchain.

“We are already digitizing all land records, so this can be the next step,” J.A. Chowdary, technology advisor to the Andhra Pradesh government, told the Thomson Reuters Foundation.

Distortion to India’s land markets is a barrier to faster growth, accounting for 1.3 percent of lost gross domestic product growth every year, according to the McKinsey Global Institute, the research arm of the global consulting firm.

Litigation is common. Matters related to land and property make up about two thirds of all civil cases in the country, according to a study released last year.

But while digitization is needed, technology alone cannot solve all matters related to land, said Sunil Kumar, director of land laws and policy at advocacy group Landesa.

“What if the data is incorrectly captured? To get a clean record, you need clean inputs,” he said.

“For that you need community involvement, particularly in rural areas, to verify ownership and resolve disputes.”